Vine Solutions Presents: Every Day Value, The Restaurant Accounting and Operations Blog » Restaurant Operations

Business Meal Tax Deduction Proposal

Vine Admin — Thu, 13 May 2010 17:38:31 +0000

Prior to 1993, the Federal Tax deduction rate for business meals was set at a reasonable 80% of the total cost. Since then, the rate has been set at a lowly 50%, creating a vast distinction between all other business expenses which are set at 100%. Many small business owners and restaurateurs see this disparity as a cause for complaint.

The National Restaurant Association in conjunction with many members of Congress, have been lobbying to have the percentage restored to its original rate of 80% which would help ease the pockets for many who utilize dining as a critical means for conducting business. Representatives Shelly Berkeley of Nevada and Daniel Inouye from Hawaii, have been leading the legislation within the Senate floor to allow for the original rate to be reinstated.

In addition to the already long list of positive outcomes associated with increasing the Business Meal Tax Deduction rate, the most prominent being the generation of $18 billion for the economy and an almost $6 billion in business meal sales, according to the National Restaurant Association. “Increasing the business-meal deduction is critical to small and independent business, especially in foodservice, travel, tourism, and entertainment…It would also immediately help stimulate the economy.” states David Koenig, the Association’s Tax and Profitability Director.

The National Restaurant Association urges restaurateurs and small business owners to voice their opinion on the Business Meal Tax Deduction, and support the bill which would once again increase the meal deduction to 80%, and help to stimulate the economy and generate more business for the restaurant industry.

The New Healthcare Reform

Vine Admin — Tue, 13 Apr 2010 18:21:12 +0000

If you have dined out at any major restaurant chain in the last several months (think T.G.I.Friday’s, P.F. Chang’s, The Cheesecake Factory, or California Pizza Kitchen just to name a few), you might have noticed a significant addition to their menus; the implementation of healthier options for which to choose. Coincidence? Not hardly. As part of the new Healthcare Reform Package just signed by President Obama, the healthcare bill has added a stringent component to menus mandating that they disclose all nutritional content including the total fat, calories, sodium, carbohydrates, fiber and protein per each menu item listed.

This, which is favored by nutritionists and the Restaurant Industry alike, is believed to help reinforce the standardization of food preparation despite those mitigating factors such as location or kitchen staff. “This legislation will replace a growing patchwork of varying state and local regulations with one consistent national standard that helps consumers make choices that are best for themselves and their families” reports Dawn Sweeney,. Chief Executive of the National Restaurant Association. In addition to the health efforts the law initiates, under the new Federal bill passed, restaurants, drive-thru’s, and bars will now all be required to follow the current labeling already found on all packaged foods, allowing for a more uniformed standard in food practices.

In a recent survey in the March edition of ‘Restaurants and Institutions’ Magazine, 43.7% of individuals polled agreed with the statement that they would prefer to see nutritional information printed on menus and menu boards. In driving this point even further, The National Restaurant Association has predicted that when diners see the corresponding caloric totals next to the items available to choose from, individuals will be more inclined to choose those that are more healthful.

Regardless of whether you are a supporter of the newly integrated healthcare bill and perceive it to be a necessary component to making more educated food selections while dining out, or you feel it’s implications on individual choice leave you feeling too restricted by government influence, one component remains true; certain components of the bill have gone into effect immediately whereas others are predicted to take several months if not years to become fully enacted.

Proposed Gift Card Legislation leaves many up in Arms

Vine Admin — Tue, 06 Apr 2010 19:02:38 +0000

The current law pertaining to the usage of gift cards can vary depending on the store or restaurant’s policy where the gift card is being redeemed or purchased. However, this freedom on behalf of the retailer and/or restaurateur in creating their own rules is dangerously close to being revoked. With the recent proposal for legislation by Senator Ellen Corbett, she hopes to mandate that restaurants be forced to cash out gift cards with a monetary value of $20.00 or less to all patrons.

Many are taking steps to insure this law does not go into effect due largely because of the potentially negative implications this could cause restaurants as a whole. As stated by the California Restaurant Association which vehemently opposes this law, “Under the SB 885 (gift card cash out proposal), a restaurant could issue a gift card, incur the fees associated with the issuance of the card…, and then be forced to pay the full amount upon redemption.” Restaurants could find themselves at a grave disadvantage given the fact that under the proposed law, the allowances by patrons require no purchase in order to redeem the cash from the gift card.

In addition to the negative repercussions due to money loss for restaurants, this proposition for legislation also creates another potential threat for both consumers and restaurateurs alike. Because under the proposed law any one person may enter into a restaurant establishment and receive cash on the spot, the chances for heightened security fraud increase. Gift cards not only have a greater chance of being stolen, but also make it more enticing for criminals with a stolen credit card to purchase gift cards either online or at a restaurant and receive cash instantaneously.

The California Restaurant Association along with many restaurateurs, are advocating that those also in opposition with the current proposal for SB 885, contact their local state Senator. Let them know of your discontentment with the law’s specifications as well as your concern for the overall harmful effects it could pose for the restaurant industry as a whole.

Is your Restaurant hosting a Holiday Party?

Vine Admin — Fri, 11 Dec 2009 20:24:23 +0000

The Holiday season means many things to many people, but for restaurateurs it is all about hosting the Holiday Party! Hosting Holiday parties at your restaurant can be a fantastic way to boost both your brand and your cash flow. However, in order to reap the financial rewards you must be sure to manage these parties correctly otherwise they can become a financial drain.

If you want to host Holiday parties at the restaurant itself, you need to decide if it is worth closing the restaurant for the duration of the party versus the sales of what your normal customer traffic would bring in. For example, if a restaurant normally does $5 thousand on a Thursday night, a Holiday buy-out would need to bring in at least 6 to 7 thousand in order to make it worthwhile. Also, try to encourage prospective party clients to book on slower days by offering better deals. Thus, that $6 thousand event gets better Food & Beverage options for the same price, but they have to come in on a Monday. This will easily surpass your normal Monday evening sales, while still keeping your weekends open for your regular customers.

Extreme attention must also be paid to give enough advanced warning to your regular customers during these periods. You can never put a price on a guest that arrived to have a fabulous meal at their favorite restaurant, only to find it closed for a private party. Be sure to use all your resources to alert customers of holiday schedules, including using your Facebook and Twitter accounts to notify regulars.

Another great option, instead of hosting the party at your establishment, is to offer a holiday season catering option for off-site events. As long as you remember to keep the cost of set up, clean up, and tear down at a minimum, this is the best way to make additional revenue without the cost of losing regular business to your restaurant.

Another issue that you must steer clear from is giving customers the option of an all inclusive package, especially those with alcohol. This could easily get out of hand and end up costing you money rather than making you money. Try options such as giving a two drink per person inclusive option, or set a specific dollar amount of free alcohol before turning it into a cash bar.

These events should be treated as catering events, with a minimum food & beverage limit with a confirmation required one week prior to the event for ordering purposes. It is imperative that you give yourself enough time from the confirmation date to the party so that you are able to maintain all of the products and staff needed for a successful event.

Vine Solutions, Inc. was incorporated in 1996 and has offices in Corte Madera and Santa Monica, California. Vine Solutions, Inc., provides accounting and financial advisory services to a variety of high volume independent restaurants and regional chains. For more information, e-mail Vine Solutions at info@vinesolutions.com, follow us on twitter at twitter.com/VineSolutions or read our blog at restaurantaccountingblog.com.

The Business of Food: Controlling your Costs

Vine Admin — Tue, 17 Nov 2009 21:53:57 +0000

People love eating fine foods, and this country is full of fantastic restaurants which strive to fulfill the palettes of these culinary aficionados. However, the high-end restaurant industry is finding that with the current economic conditions, customers are eating out less – especially in the fine-dining business. There has been a noticeable decline in check averages and sale, yet prices for commodities are still high along with minimum wage and benefits costs. How does a restaurateur balance their desire to serve the best cuisine while also maintaining a tightly run restaurant?

First and foremost, restaurateurs must not forget that they are a business in need of strong financial management. Focus must be put on gaining timely financial information in order to make smart operational decisions. John Priest, VP of Operations at Vine Solutions, Inc. says, “Focus must be put on curbing excess spending and re-evaluating current operations. Food and beverage costs have to be adjusted to be financially sound.”

Although every restaurant strives to have creative dishes, menu planning must focus on the cost of the ingredients. Each recipe placed on a menu must be individually costed out beforehand. Chefs should also try to include using all parts of the ingredients in their dishes. Waste management should be focused on not only for environmental purposes but also to eliminate unnecessary spending. Special focus needs to be spent on labor costs – especially back of house costs. Weekly schedules also need to be costed out and significant overtime must be eliminated.

Through the next few years, some restaurants will not survive and others will. Old favorites will close, and new endeavors will open. Great food and great restaurants can be inspirational to everyone, and because of this, the culinary world is a resilient world. “Restaurants need to understand that it is going to be a tough road, with many hard decisions to be made,” Priest states, “however, those who come out on the other side of this will be stronger, more confident, and more prosperous than ever.”

Focus Back on the Guest: Solutions to Handling your Restaurant Finances

Vine Admin — Mon, 09 Nov 2009 22:32:05 +0000

Owning a restaurant not only takes substantial knowledge and a passion for food, but savvy business skills and strong accounting knowledge are critical to maintaining a successful operation. Many times restaurants have fantastic food and high guest counts, but suffer because of poor financial oversight. Operators have found that there are many accounting services specifically dedicated to the restaurant industry which help to efficiently manage the financial aspects of their restaurant so they can put their focus back on the food and guest experience.

The need for this type of service is evident with the amount of solutions available today, from the simple accounting software to premier outsourced accounting services. Paul Shenkman, owner of Sam’s Chowder House in Half Moon Bay, understands the need for detailed financial information. He stated that, “with Sam’s Chowder House, our challenge was managing a high-volume restaurant of significant size, where a mistake in forecasting can be significant. It’s critical for us to stay on top of our restaurant’s performance and trends, from food to beverage to employees.”

Shenkman has been using Vine Solutions, Inc. as their outsourced accounting solution and attributes their services to helping them get their reporting systems in place while also gaining, “the benefit of a team of people who understand the restaurant business and, in many cases, have been there themselves.” Owner and CEO of Vine Solutions, Edward Levine, who is also developer and principal partner of the Left Bank Brasseries, established the operation to aid his fellow restaurateurs with their financial matters. He found the need to be so great that in 1996, Levine had Vine Solutions incorporated and in 2008 opened a second office in Southern California.

John Priest, VP of Operations for Vine Solutions states, “with our system, you not only benefit from having daily invoice and vendor issues taken off your hands, but you also have access to premier reporting tools so you have can view current financial information and trends. Having this type of information helps gain a plan for the larger picture of your restaurant and future financial performance.”

Develop a Catering Program for a Successful Restaurant Business

Vine Admin — Fri, 23 Oct 2009 22:09:12 +0000

Restaurants are always looking for new ways to offset the rising costs of operations. However, one of the best ways, and many times overlooked, is to provide a catering option for your restaurant. Catering can be a profitable venture if done correctly. You have a confirmed head count and confirmed dollars spent, a sort of guaranteed business rather than waiting for customers to walk through the door. The biggest benefit of guaranteed business is the ability to control costs and improve profit margins.

If you are not ready yet for a full catering program, another offshoot that has gained interest recently is a Boxed Lunch Program. If you are in an area with a high business customer market, this may be a great option to boost your lunch sales. However, besides just the business customer, the in home catering options have seen a huge growth with four in ten customers surveyed said they were planning on entertaining at home more often than in the past. According to the market-research firm Technomic, the consumer catering market is valued at $3.3 billion – nearly double the value of the business-to-business market. If you have not yet taken advantage of this, now is the time.

On the flip side, there are also often additional costs associated with catering. It is imperative to have the right staff in place, in order to coordinate and organize the food, setup, and clean up. All of these steps need to be built into the cost of the event. Often, operators forget about these costs and lose money because the two hours to set up and the hour to break down were overlooked. However, if done correctly, this type of catering option will help solidify your restaurant’s future and give a much needed boost to your bottom line.

Many of Vine Solutions clients have catering programs, so if you are considering a program but have questions about the best way to set up your program, please don’t hesitate to contact us here.

Is your Restaurant on Twitter yet?

Vine Admin — Fri, 16 Oct 2009 18:34:05 +0000

You may have thought it was just a fad, but the fact is that Twitter seems to be a new media source that is going to be around for awhile. However, for the restaurant business, this may be a good thing. Twitter has found a new way to provide customer interaction and has provided a new outlet for marketing and promotional opportunities. Restaurants such as 1300 on Fillmore, and Yoshi’s have taken advantage of sharing their special events and menus while everyday gaining a larger follower base.

How do you use it?:

Sign up for a free account: Pick your username carefully as that is how your customers will be able to identify and search for you.
Update your profile to include a link to your website and a brief overview of your restaurant’s concept.
Tweet (Post) relevant information that your customers would appreciate including menu specials, promotions and special events.
Start following other food industry Tweeters. Not only will this provide you with ideas and information to tweet about, but you can also re-tweet (RT) important news and resources for your customers.
Sign up for a URL shortener, like bit.ly so you can post other links to websites and stories. This also helps track how many people clicked on your link so you can analyze what information is most used by your followers, and who is re-tweeting your original link.
Restaurants are also focusing on special twitter promotions where a secret word is tweeted and diners can use the word for an extra discount. By doing this and tracking the people who get the discount you can measure the effectiveness of your twitter page.
Add your twitter to directories such as wefollow or twellow to generate further traffic.
Put a link on your website to your twitter page.
Post updates to your twitter on a regular basis. Interact with other users. Remember, the more quality information you provide the more likely people will keep following you!

Remember that Twitter does take constant upkeep; make sure you have a dedicated ‘tweeter’ on staff. However, over time your marketing efforts should pay off, and this free service can be turned around into gaining a loyal customer base.

Is your Restaurant Prepared for the Flu Season?

Vine Admin — Thu, 01 Oct 2009 16:40:13 +0000

We all put great focus into maintaining cleanliness in our restaurants; however, it is a fact that restaurants, as with many other public establishments, are easy target for the spread of germs and illness. With the potential spread of the H1N1, ‘Swine’ Flu this fall, restaurants need to start acting now to prevent any potential spread of the illness to your establishment.

The National Restaurant Association along with the Centers for Disease Control and Prevention and Ecolab have put together a recommendation plan to help control the spread of the virus:

Base your strategies and response on information from state and local health officials concerning the severity of the outbreak as well as on an anticipated amount of worker absenteeism in your business. Communicate your plans to employees.
Encourage your employees to be vaccinated against the flu.
Advise workers exhibiting flu-like systems to remain at home and not return to work until at least 24 hours after the fever has passed. Expect workers to be out for three to five days in most cases. Ensure that leave policies are flexible and not punitive.
Flu viruses can spread from person to person through the air, so ask employees to cover their mouth and nose when they cough or sneeze. Provide tissues and other disposables for employees and customers to use.
Reinforce personal hygiene. Advise employees to wash their hands regularly using soap and water, wipes or alcohol-based hand cleaners.
Cross-train personnel to perform critical functions in the event that key employees are absent.
Increase cleaning and disinfection frequency, particularly for such touch points as door handles, tables and registers. Deep clean at least three times a day during an outbreak.
Consider closing public gathering areas like beverage and condiment dispensers, buffets, salad bars and, depending upon the severity of the outbreak, table service.
Consider closing and offering only drive-thru service or delivery only in case of a severe pandemic, like the one that occurred earlier this year in Mexico.

We encourage you to look over and discuss implementing these tips as a way to keep your business healthy through this flu season.

Is your Restaurant Rewarding your Regulars?

Vine Admin — Mon, 28 Sep 2009 16:48:34 +0000

Unfortunately, restaurants of today cannot rely on foot traffic alone to sustain the clientele needed for a successful business. Twitter and Facebook have changed the face of restaurant marketing, and has made it obvious that restaurant operators need to become actively participatory in generating their own business. However, there are many operators out there who may not be quiet ready to delve into the world of social media marketing. If this is the case for you, don’t worry, there are other options for marketing your restaurant. Now may be the ideal time to look into creating a Member Rewards Program to gain a strong repeat client base while also rewarding those customers who may soon become your ‘regulars.’

Much like the airline industry has learned, giving rewards to your loyal clientele base can become big payoff for you business. Open Table, the online restaurant reservation system, has also started their own Dining Rewards program to generate repeat customers to using their booking services. Registered members earn points for every reservation made and honored through their system. Once enough points are earned, members are rewarded with an Open Table Dining Cheque that is good at any of their client’s restaurants.

Single unit Restaurants can also take advantage of this type of program. Accademia di Vino, a wine bar in New York City, offers a Member Rewards Program where a point is given for every dollar spent. Points can then be used for rewards on their next visit, or if a total of 250 points are accrued, members are given a credit of $25 on their account.

If you have not yet visited the idea of a Member Rewards Program, now may be the perfect time to do so. People are looking for the great deals that will help them save money while still enjoying the eateries that they love.